A BILL to amend and reenact §47-21-2 and §47-21-20 of the Code of
West Virginia, 1931, as amended; and to amend said code by
adding thereto a new section, designated §47-21-19a, all
relating to charitable raffles; and allowing certain fraternal
societies and veteran’s organizations to use electronic or
mechanical raffle devices to conduct raffles.

Be it enacted by the Legislature of West Virginia:

That §47-21-2 and §47-21-20 of the Code of West Virginia,
1931, as amended, be amended and reenacted; and to amend said code
by adding thereto a new section, designated §47-21-19a, all to read
as follows:

ARTICLE 21. CHARITABLE RAFFLES.

§47-21-2. Definitions.

For purposes of this article, unless specified otherwise:

(a) "Charitable or public service activity or endeavor" means
any bona fide activity or endeavor which directly benefits a number
of people by:

(1) Contributing to educational or religious purposes; or

(2) Relieving them from disease, distress, suffering,
constraint or the effects of poverty; or

(3) Increasing their comprehension of and devotion to the
principles upon which this nation was founded and to the principles
of good citizenship; or

(4) Making them aware of or educating them about issues of
public concern so long as the activity or endeavor is not aimed at
supporting or participating in the campaign of any candidate for
public office; or

(5) By lessening the burdens borne by government or
voluntarily supporting, augmenting or supplementing services which
government would normally render to the people; or

(6) Providing or supporting nonprofit community activities for
youth, senior citizens or the disabled; or

(7) Providing or supporting nonprofit cultural or artistic
activities; or

(8) Providing or supporting any political party executive
committee.

(b) "Charitable or public service organization" means a bona
fide, not for profit, tax-exempt, benevolent, educational,
philanthropic, humane, patriotic, civic, religious, fraternal or
eleemosynary incorporated or unincorporated association or
organization; or a volunteer fire department, rescue unit or other
similar volunteer community service organization or association;
but does not include any nonprofit association or organization,
whether incorporated or not, which is organized primarily for the
purposes of influencing legislation or supporting or promoting the
campaign of any single candidate for public office.

(d) "Concession" means any stand, booth, cart, counter or
other facility, whether stationary or movable, where beverages,
both alcoholic and nonalcoholic, food, snacks, cigarettes or other
tobacco products, newspapers, souvenirs or any other items are sold
to patrons by an individual operating the facility.
Notwithstanding anything contained in subdivision (2), subsection
(a), section twelve, article seven, chapter sixty of this code to
the contrary, "concession" includes beverages which are regulated
by and shall be subject to the provisions of chapter sixty of this
code.

(e) "Conduct" means to direct the actual holding of a raffle
by activities including, but not limited to, handing out tickets,
collecting money, drawing the winning numbers or names, announcing
the winning numbers or names, posting the winning numbers or names,
verifying winners and awarding prizes.

(f) “Electronic or mechanical raffle device” means any
electronic or mechanical raffle ticket dispenser, raffle ticket
reader or other electronic or mechanical device of whatever design
or function, designed or used to enhance or aid the conduct of a
raffle. This subsection may not be interpreted to include or
prevent the use of:

(1) Hand cranked or motorized drum mixers which randomly mix
tickets or other indicia together for the purpose of allowing the
hand drawing of a ticket or winning indicia.

(2) A cash register for handling proceeds of sales and other
ordinary cash handling and record keeping functions of a raffle
licensee.

(3) Accounting and record keeping software for the purpose of
maintaining accounting and reporting records of the licensee, and
the computer for running those applications, not used in the play
of any game.

(f)(g) "Expend net proceeds for charitable or public service
purposes" means to devote the net proceeds of a raffle occasion or
occasions to a qualified recipient organization or as otherwise
provided by this article and approved by the commissioner pursuant
to section fifteen of this article.

(h) “Fraternal Society or veteran’s organization” means afraternal society or veteran’s organization that is: (1) A
fraternal beneficiary society that is exempt from federal income
tax under section 501(c)(8) of the Internal Revenue Code of 1986,
as amended; (2) a domestic fraternal society that is exempt from
federal income tax under section 501(c)(10); or (3) a veterans’
organization that is exempt from federal income tax under section
501(c)(19) of the Internal Revenue Code.

(g)(I) "Gross proceeds" means all moneys collected or
received from the conduct of a raffle or raffles at all raffle
occasions held by a licensee during a license period; this term
shallmay not be deemedconsidered to include any moneys collected
or received from the sale of concessions at raffle occasions.

(h)(j) "Joint raffle occasion" means a single gathering or
session at which a series of one or more successive raffles is
conducted by two or more licensees.

(I)(k) "Licensee" means any organization or association
granted an annual or limited occasion license pursuant to the
provisions of this article.

(j)(l) "Net proceeds" means all moneys collected or received
from the conduct of raffle or raffles at occasions held by a
licensee during a license period after payment of the raffle
expenses authorized by sections eleven, thirteen and fifteen of
this article; this term shallmay not be deemedconsidered to
include moneys collected or received from the sale of concessions
at raffle occasions.

(l)(n) "Patron" means any individual who attends a raffle
occasion other than an individual who is participating in the
conduct of the occasion or in the operation of any concession,
whether or not the individual is charged an entrance fee or
participates in any raffle.

(m)(o) "Qualified recipient organization" means any bona
fide, not for profit, tax-exempt, as defined in subdivision (p)® of
this section, incorporated or unincorporated association or
organization which is organized and functions exclusively to
directly benefit a number of people as provided in subparagraphs
(1) through (7), subdivision (a) of this section. "Qualified
recipient organization" includes, without limitation, any licensee
which is organized and functions exclusively as provided in this
subdivision.

(n)(p) "Raffle" means a game involving the selling or
distribution of paper tickets, not enhanced or aided by the use of
any electronic or mechanical raffle ticket dispenser, raffle ticket
reader or other electronic or mechanical device of whatever design
or function, entitling the holder or holders to participate in a
raffle game for a chance on a prize or prizes. This subsection
shall not be interpreted to prevent the use of:

(1) Hand cranked or motorized drum mixers which randomly mix
tickets or other indicia together for the purpose of allowing the
hand drawing of a ticket or winning indicia.

(2) A cash register for handling proceeds of sales and other
ordinary cash handling and record keeping functions of a raffle
licensee.

(3) Accounting and recordkeeping software for the purpose of
maintaining accounting and reporting records of the licensee, and
the computer for running those applications, not used in the play
of any game.

(o)(q) "Raffle occasion" or "occasion" means a single
gathering or session at which a series of one or more successive
raffles is conducted by a single licensee.

(p)® "Tax-exempt association or organization" means an
association or organization which is, and has received from the
"Internal Revenue Service" a determination letter that is currently
in effect stating that the organization is exempt from federal
income taxation under subsection 501(a) and described in subsection
501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10), 501(c)(19) or 501(d)
of the Internal Revenue Code of 1986, as amended; or is exempt from
income taxes under subsection 527(a) of said code.

§47-21-19a. Use of electronic or mechanical raffle devices

prohibited; exceptions.

(a) Except as specifically authorized in subsection (b) of
this section,a person licensed under this article and a person who
operates a raffle without a license under section three of this
articlemay not conduct a raffle by the use or means of an
electronic or mechanical raffle device.

(b) A licensed fraternal society or veteran’s organization may
operate or conduct a raffle by the use or operation of an
electronic or mechanical raffle device: Provided, That not more
than five electronic or mechanical raffle devices may be used or
located upon the premises for which the license was issued.

(a) Any person who knowingly violates any provisions of this
article, other than the provisions of sections eighteen or nineteen
or subsection (b) of this section, is guilty of a misdemeanor and,
upon conviction thereof, shall be fined not less than $100 nor more
than $1,000; and, upon a second or subsequent conviction thereof,
shall be fined not less than $100 nor more than $100,000 or
confined in jail not more than one year or both fined and confined.

(b) On and after July 1, 2010, Any person licensed under this
article or any person who operates a raffle without a license under
section three of this article who is in possession of any
electronic or mechanical raffle ticket dispenser, raffle ticket
reader or other electronic or mechanical device of whatever design
or function, other than those machines and apparatus allowed under
subsection (n) of section two of this article,device, other than
those electronic or mechanical raffle devices allowed under
subsection (b) of section nineteen-a of this article, that is used
or designed to be used as part of a licensed raffle is guilty of a
felony and, upon conviction thereof, shall be imprisoned in a state
correctional facility for a term of not less than one year nor more
than three years, and fined not less than $50,000, nor more than
$100,000, for each electronic or mechanical raffle ticket
dispenser, raffle ticket reader or other electronic or mechanical
device of whatever design or function, other than those machines
and apparatus allowed under subsection (n) of section two of this
article,device, other than those electronic or mechanical raffle
devices allowed under subsection (b) of section nineteen-a of this
article, in the person’s actual or constructive possession in this
state. For a person other than an individual, upon conviction, the
fine may not be less than $100,000 nor more than $500,000 for each
video electronic or mechanical raffle ticket dispenser, raffle
ticket reader or other electronic or mechanical device of whatever
design or function in the person’s actual or constructive
possession in this state.

(d) In addition to any other penalty provided by law, any
person, licensed or unlicensed under this article, who violates any
provisions of this article, or who fails to perform any of the
duties or obligations created and imposed upon them by the
provisions of this article, other than the provisions of sections
eighteen or nineteen of this article, or subsection (b) of this
section, is subject to a civil penalty as may be determined by the
Tax Commissioner in an amount not to exceed $10,000.

NOTE: The purpose of this bill is to allow certain fraternal
societies and veteran’s organizations to use electronic or
mechanical raffle devices to conduct raffles.

Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.